Bad Credit Question – Help!

posted 3 years ago in Money
Post # 3
3989 posts
Honey bee
  • Wedding: October 2011

How did you ruin your credit? Late payments?  No payments?  Were you ever sent to collections?

That can give us a better idea of how long it may take to improve.

(For example, if you were sent to collections then it will take 7 years to come off of your record)

Post # 5
1362 posts
Bumble bee
  • Wedding: September 2014 - Turf Valley

Are your debts in collections, or are they active CC balances?

If they are in collections, your score may improve a little.  However, the fact that they are simply there will keep your score from recovering by a large number of points.  

If they are on active CCs and not in collections, it can take anywehre from 30 – 60 days (depending on the CC owner) to report to the credit monitoring agencies.  When I paid off my active CC high balances my score went up significantly.    

But it’s ALWAYS a good idea to pay the debt off.  It bodes much better for you if debts say “Paid in full” or “settled” than for them to continue to be delinquent.  Also, I believe after 7 years debts will disappear from your credit history, assuming they are not being reported as still delinquent.

Post # 6
7997 posts
Bumble Beekeeper
  • Wedding: December 2013

I think since these debts have already gone to collections, you should do some negotiating.

I think that you should look into some legit credit counseling services (I know there’s a lot of fakes out there who take your money, so do some research!).

Post # 7
1362 posts
Bumble bee
  • Wedding: September 2014 - Turf Valley

@dreamer1288:  I also wanted to say that my financial advisor mentioned to us that (we are preparing to buy a house too using FHA) lenders like to see 3-4 + years of a good strong credit history (no late payments, etc).  FI had some credit go to collections back in 2007, and we recently paid it off, so we were told we’d be OK.  We will see though, right?  Best of luck and congratulations on paying off your debt! 🙂

Post # 8
11626 posts
Sugar Beekeeper
  • Wedding: November 1999

It takes a long time (years) to fully recover your credit score.  You’re taking the right steps now by trying to fix it, though!  Pay off the debt, and then try to stop using the cards all together.

In the meantime, keep practicing good credit skills and eventually you will be able to buy a house!  Save up as much as you can, because that makes you more attractive to a mortgage lender (you’re a safer bet if you can put 20-30% down, rather than 3-5%).

Good luck!

Post # 9
1362 posts
Bumble bee
  • Wedding: September 2014 - Turf Valley

@dreamer1288:  I do believe it is 7 years since the delinquency began.  And often times you will need to write the credit agencies, because they can be extremely slow about updating records for these things…  


Post # 11
2562 posts
Sugar bee
  • Wedding: March 2014

Make sure you don’t close all of those cards when all’s said and done! Having an amount of credit available to you and utilizing some of it (i.e. using a card for gas money and paying it off every month) can really help your score a lot.

I used Credit Karma to check my score before I bought a car… they do “soft pulls” to get your Transunion score (just the one) so it doesn’t impact your credit badly.
The only thing I have to say is apparently the score they show is often lower than your actual score (I know mine was), which isn’t really a bad thing when you think about it.
Might be a good thing to look into, so you’re more aware of how far you need to go / your progress in improving!

And I agree – find some legit credit counseling services. Might be good to start doing your own research first, before you dive head-in to it.

A quick google search yielded this article, with a book reccomendation:

Post # 13
3623 posts
Sugar bee
  • Wedding: July 2013

@dreamer1288:  It depends on how bad you were– first, pull your credit history. If you were making payments (even the minimum), it might be higher than you think. I would pay it off and close all but one account. I would not use a secured credit card– just pay in cash. Paying off your debt will give you a nice bump in 2-3 months, continuing to pay bills on time and not go into debt will help to. How much depends on where you are starting from and where you need to go.

Post # 14
5697 posts
Bee Keeper
  • Wedding: August 2012

No judging here, I did the exact same thing. I know how horrible it feels to have been irresponsible with money and dug yourself into a hole you feel like you'[ll never get out of. 

First off congratulations on paying off your remaining debt, that’s a huge accomplishment and a first step towards repairing your credit! The next thing is to take steps to start improving it. Unfortunately it’s true that collections and bad debt stay on your credit for 7 years, but that doesn’t mean you can’t improve it drastically. For one, don’t shut off ANY of your old credit cards, bad credit history is better than zero credit history. You should pull your credit reports if you haven’t recently and make sure that everything on there is correct. I’m sure there are negative things on there, but make sure that what IS on there, is proper and is yours. Dispute anything that isn’t.

Second big thing is to keep a card active and running. It’s good for your credit to keep some sort of balance, the best and most controlled way to do this is to pay a monthly bill with the card, and every month pay it off when you get the bill. That is probably fastest and best way to start to bring your score back up.  Being cosigner on a line of credit, or something like a car loan also helps, IF you can get on one with your DH.

Third, you have to be patient. credit is an imperfect and completely annoying science. There’s no perfect rule, no right way to improve it, even when you have better credit, your credit score will still say “you could be better if you did this” etc…. It should start to come up bit by bit within a few months. Hard to say to WHAT, or how long it will take to improve because it depends on your score. Good luck though!! Trust me you won’t have bad credit forever! In the mean time take this opportunity to save money for that house you guys want! The bigger down payment you have the better off you’ll be!

Post # 15
3344 posts
Sugar bee
  • Wedding: April 2013 - Rhode Island

You’re right that the first thing you should do with any extra money you have is pay off your credit card debt for good.  Credit card debt is the worst kind of debt to have.  In the future, pay off your credit card statement balance every time the statement comes each month.  Not the credit card balance, pay the statement balance.  This will keep you from getting charged interest or fees.  If you use a credit card in this way, it will actually help you to build your credit because you’ll be making on time payments every month.

Other things that affect your credit:

-How much credit you have vs. how much you use (often called “credit utilization”).  You want to have a high credit limit but use very little of it.  For example, you have a credit limit of $5000 but you never charge more than $1000 each month.  Since you’re paying it off in full each month, you never carry more than $1000 balance of your $5000 usable credit.  This is better than if you use $4500 of your available $5000.

-How often people check your credit (often called “hard inquiries”).  This is a big unknown to most people, but when you apply for something and they pull your credit score, this HURTS your credit score!  Obviously, if you really need a car, then there’s not much you can do about this because they will have to check your credit.  But you can help by not going to 5 dealerships and having all of them pull your credit.  Another thing you can do is when you get advertisements in the mail for new credit cards and such, there should be a number on the bottom of the form that you can call to remove your name from this list.  I’m talking about a number that you only have to call once every 5 years.  You give them your address and your social, and they keep you from getting unsolicited “pre-approved” offers.  These pre-approvals are given to you because someone has pulled your credit score.  (Maybe you’re not getting too many of these if your credit is bad, but it’s something to look for in the future).

-How old your credit history is.  You want to have old accounts.  Don’t close credit cards or lines of credit.  If you really don’t want one anymore, then stop using it and it will eventually close on its own.  But it’s actually good to have a lot of credit cards because this increases your available credit limit (see above).  Again, it’s important to note here that these should be in good standing and you should pay off any statement balances every month on time.

-Your credit score is made up of a record of your activity for the past 7-10 years.  This history eventually “falls off” when it goes beyond this time period.  So, no one can see that you missed a payment 11 years ago.  It depends on what happened as to how long it stays on your credit report.  I believe 7 years is credit cards and 10 years is bankruptcy (although you may want to double check this because sometimes the law changes).


You can pull your credit report once a year for free.  Use NOT freecreditreport or any other site.  It’s important to note that there are three credit reporting agencies: Experian, Equifax, and TransUnion.  Check your credit report from each one.  Sometimes they don’t all have the same information.  If you find any errors or discrepancies, you can contact that agency and ask them to update your report by providing the missing information.

You can also contest items on your credit report.  For example, I went to college for 4 years consecutively.  For whatever reason, my school reported to one of the credit agencies that I was no longer a full-time student.  This caused my student loans to go into repayment.  Since I wasn’t making payments (because I had no idea this error had occurred), I was missing payments and it was hurting my credit.  Once I pulled my report and saw this, I got a letter from the school saying this was in error and sent it to the credit reporting agency to have them remove the delinquencies from my credit history.

This error was obviously not caused by anything I had done, but you can also contest stuff that is your fault.  For example, I missed a credit card payment one time in an otherwise flawless history.  I called all 3 agencies and explained how I have a great track record and could they excuse this one mistake.  2 of the 3 agencies agreed to remove it.

There are some sites that can help you monitor your credit for free.  I like CreditKarma (which shows your TransUnion credit score) and Quizzle (which shows your Experian credit score).  Note that they have parts of the websites that cost money to use.  Just ignore that stuff and use the free features.  You don’t need to pay money to work on your credit when you can pull your reports for free once a year.

You’re doing the right thing by trying to fix your credit now.  It can take years to fix, so it’s something you want to start right away.  The time to work on your credit is NOT when you need to use it.  (For example, you want to buy a house this month).  The time to work on your credit is NOW so that when you do need it, you have it.

Post # 16
4043 posts
Honey bee

@dreamer1288:  When was the last time your ran your credit history report and score? 

You should look into using creditkarma or similar tool that helps you monitor and work on repairing your credit score. 

It depends on your situation, but it can take a long time to repair your credit. The good news is you can potentially have your husband buy a home with his credit alone, depending on how much he makes and how much you two want to spend. The catch is you can’t be on the loan, but you can be on the title to the home.

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